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Customer Success: How Businesses are Becoming Client-Focused

We live in the best era to be a customer and it’s just getting better. Before internet, the company owned the power to sell a product. They had all the information about it, the customer couldn’t see a ‘review page’ or something like that. A closed-won sale mainly depended on the relationship with the client and the salesperson.

Then, came the internet, the customers owned information. A few minutes searching, they could find everything about a company: who bought from them, reviews about the product, prices, etc. One big win for customers.

Now, we have the cloud. But before I talk about the benefits it brought, we have to understand how the world was before it. Before cloud, companies that bought a new software had to host it in their own office and had to hire a IT staff to maintain and to update it. The process was extremely expensive, time consuming and, the worst part, it tied the company to the software’s provider because of the initial cost and time invested.

In the world after cloud, enterprises don’t even need to host their own software anymore and you can start using a service/software from another company in minutes without even communicating with them personally (Netflix and Spotify are great examples of buying a product without needing to talk to a person). This is the era of subscription. Another big win for customers.

This new model of business brought accessibility and options for customers. No business is tied to another anymore, at least physically. It’s possible to opt-out whenever they want. Nowadays, the customer has already searched the options available before buying anything. When he chooses a company to solve his problem and that company can’t solve it, he simply changes to another one. The power is on the customer’s hands.

The subscription model forced enterprises to be the best option available for customers, and with nowadays’ easiness to opt-out, the company has to win the customer’s loyalty every single day. This new concept marked the birth of the Customer Success ideology.

And I’m not just talking about client support or just having a Customer Success organization inside the company. I’m talking about a philosophy that goes beyond one single department. It’s the drive of the business, it’s present on sales, marketing, support, product development, operations, everywhere! I see it as the final layer that drives and keeps all departments together to make customers wildly successful.

With this new philosophy in business, it’s creating a relationship of win-win-win. Think this way, you are a company that sells B2B. If you make your customer successful, you get success from their success because they’ll keep making deals with you and even buying more solutions from you. If your customer is successful because your product helped them to reduce costs, to improve efficiency or to increase revenue, their customers are also being impacted somehow. Everybody wins.

Before the raise of the Customer Success philosophy, we used to see companies focused on getting more and more deals, so the focus was on the sales team. They had authority and autonomy. Now, there’s another way to see it. Think about this: what is more expensive, acquiring new customers or maintaining them?

I’m not saying that sales isn’t important, I’m saying that there’s something more important to worry about than closing more deals. And that’s churn. Churn is a metric that indicates the number of clients who opted-out in a period of time, in other words, it’s all the dollars that you could be earning, but you aren’t, because you lost customers.

So, how to measure and reduce churn? That’s the job of a Customer Success Manager (CSM). The real question now is: What does a CSM do in the day by a day in a company?

To answer this question, Bessemer Venture Partners created the ‘Ten Laws of Customer Success’ to serve as a guide of best practices for CSMs.

The Ten Laws of Customer Success

Law 1: Sell to the Right Customer

It isn’t a coincidence that ‘Sell to the Right Customer’ is the First Law. The best way to achieve a high churn rate is to sell to the wrong customer.

“Ninety percent of all churn happens at the time of sale.” Dave Kellog, CEO at Host Analytics

The CSM has to interpret the data that comes from Customer Support, the CRM platform, Product Development team and Marketing to understand if a potential customer has fit.

See this way: you close a deal with a wrong customer that will never adapt to your product, in other words, you can’t make him successful. He uses your customer support channel more often than others, he demands changes in the product, and in overall, demands time and energy from your team, and at the end, ends up churning.

The salesperson cannot decide whether a lead buys or doesn’t, the final decision is always his. The only thing a salesperson can control is his time. When your sales team is investing time in the wrong customers that will end up consuming your team’s energy with no return, it’ll damage your whole company. This law is to empower the CSM to say no when it’s needed and change directions based on data.

Law 2: The Natural Tendency for Customers and Vendors Is to Drift Apart

Before you close a deal, generally the salesperson and the customer are never so close to each other.

“Customers and vendors tend to drift apart if neither party takes any action. They are like two boats side-by-side in the middle of a lake but with no one in either boat. Inevitably, those two boats will not remain side-by-side, and probably not even in proximity. Someone has to be in at least one of the boats, preferably both, and with oars to keep them next to each other. In our SaaS world, and every recurring revenue business, this is no longer just a nice idea. It’s an imperative.” From the book Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue

I love this analogy. A salesperson closes the deal and he tends to think that his job is done. But in the subscription reality, the ‘sales’ starts when the deal is closed.

You can always make more money by upsells and maintaining customers. Your mainly focus is: Make Them Wildly Successful.

Law 3: Customers Expect You to Make Them Wildly Successful

And wouldn’t that the way it should be? Customers buy your product not to use its features and functions. They buy a solution for their problem and the relationship with you because they want to achieve a business objective. And it’s your job to understand what success means for them.

The best moment to make your customer successful is when the deal is closed. You have to enjoy this momentum, so you need to break your client’s goal into small pieces and start achieving them fast. The people who were involved in closing the deal (considering it’s a B2B deal) will move to another project soon or later. You have to make your customer successful while you still have promotors in your customer’s company. Truly care about their goals and in consequence you’ll end up having more upsells and revenue.

Law 4: Relentlessly Monitor and Manage Customer Health

There are a lot of important metrics to measure Customer Health. Such as number of cases opened in support, % of open rate of your emails, % of click-rate, product usage, NPS, etc.

You have to find the right metrics that would genuinely measure Customer Health in your company. Remember that you can always ask your customers directly.

There are two golden rules in this law

Find out what metrics are important to monitor customer health

Do something with this data to improve customer health

Knowing your customer, you’ll never send an email like this again: “Hey Chris, how things are going?” No! Because you’ll know how things are going. Actively managing your clients, you’ll have something like this: “Hey Chris, I noticed that in the last two weeks, two of your accounts didn’t log into our software, based on the last cases opened in the Customer Support, I’m sending you some blog posts that can help you enjoy the most of our solution. If you need anything else, I’ll be happy to schedule a call with you!”

Show that you know what you’re doing. Keep measuring and managing Customer Health. This way, it’s possible to predict an upsell or a churn.

Law 5: You Can No Longer Build Loyalty through Personal Relationships

Think about that, your business is growing exponentially and your customers raising disproportionately to your staff. The cost of hiring more staff doesn’t compensate. You have to use technology.

Also, you have to know who are your High Touch, Low Touch and Tech Touch customers. To explain it in a simple manner: High Touch customers are your most important accounts that need full attention and human interaction. Low Touch is in the middle, you have to mix between human and tech communication. And in Tech Touch, there’s no human interaction at all. You know that in today’s world, there’s a lack of human interaction, so the more you can personalize your contact with your clients, the better.

Personal Relationships aren’t the base here anymore. The most majority of SaaS businesses can’t afford to have human beings for every customer of a company because they’re not affording that much per customer. However, customer experience continues being a top priority of a company. So, how to do it?

You have to create a design so good that you don’t even need a customer support and let your one-to-one touch for the High Touch layer. But we don’t live in this ideal world, we’re close to get there, but not yet. I give you an example: Facebook and Instagram. They’re really simple. You have just to create an account and start using it. The design itself guides you. In Instagram, if you already have an account on Facebook, you don’t even need to create another one, you can use the same. There are just a few buttons in it, and you can easily post a picture and edit it while you’re posting it. Awesome right? You don’t even feel like a customer (but you are).

So, before hiring a lot of people to your team, think about it. Is there a problem of lacking people or is there a problem in your product or in your processes? The best way to be creative is to restrict your resources. Don’t get crazy about spending a lot of money!

Law 6: Product Is Your Only Scalable Differentiator

Taking the hook from the law above. Think about it, a well made design along with a great customer experience that can meet the needs of your clients will surely grow.

One thing that you must have in your mind. You may have the best customer service, support, the best salesperson, but you won’t be successful if you have a poor product that doesn’t make your clients successful. It’s like having a restaurant with awesome waiters, a cool environment, but serving bad meals. The premise of Customer Success is Deliver on the sales promise.

A really good product summed with the Customer Success philosophy will definitely scale.

Law 7: Obsessively Improve Time-to-Value

Don’t lose your momentum. Be fast to deliver value. Have in mind the Customer’s goals, break them into small-wins and start delivering results. Remember the third Law. They expect you to make them wildly successful, and there’s no better time to do that than the moment you close the deal.

Be obsessive about how long it takes to implement and to train customers. The more you make it automatic and faster, you’ll be improving your time-to-value.

Law 8: Deeply Understand Your Customer Metrics

Understand what success means to them. Maybe your metric of product usage is a success for your company, but it might not be for theirs. Just using your product doesn’t mean that it’s solving a problem. Be aware of your client’s goals and literally make plans with him to reach his goals.

Law 9: Drive Customer Success through Hard Metrics

Challenge your customer to be better. Success isn’t a destination, it’s a constant process (or if you prefer, it’s a philosophy). Challenge your customer to achieve higher goals, to make their dreams come true.

Law 10: It’s a Top-Down, Company-Wide Commitment

Customer Success isn’t just an organization inside your company, it’s a philosophy that has to be nurtured from the top. That’s why it’s becoming more and more common businesses have a Chief Customer Office that has a place on the executive board.

Stone is a technology company that offers solutions of payment. In Brazil, there was a double monopoly in the market of payments, two single companies owned everything. Every single business needs to receive payments, and they’re made by cards or money. If a company doesn’t accept credit card, it risks losing sales. So, the Brazilian Entrepreneurs were forced to hire the companies that used to dominate this market.

In 2009, the Central Bank of Brazil, after a long study, concluded that this monopoly was harming our economy, so they put an end on this, allowing companies to make part of the market by letting them affiliate to Visa, MasterCard and all the other flags. That’s when Stone was born in the physical payment market.

In the double monopoly, the Brazilian Entrepreneurs didn’t have a choice. That’s why Stone was born: to charge a fair price and focus on the clients.

Stone innovates by applying the Ten Laws of Customer Success in the market of payments. Let me tell you how I perceive it.

Law 1: Sell to The Right Customer

Every company needs to receive money, so Stone could literally sell to everyone. But it doesn’t do that. Stone hires a highly expensive labor (mainly engineers) to educate potential customers about options.

There are salesmen throughout Brazil going to stores and asking questions to the entrepreneurs to understand how their businesses work. Stone knows that they have to understand a business before offering anything, and if they see that they aren’t the best solution, they recommend an alternative that will make them successful.

Law 2: The Natural Tendency for Customers and Vendors Is to Drift Apart

There are salesmen all around Brazil knocking door to door and getting face-to-face with customers. They have routes and own their area with strict metrics of follow-ups to ensure that customers are happy with Stone’s solution.

There’s also a ‘Channel of Relationships’ that picks up the phone in less than 15 seconds and has autonomy to solve customer’s problems without transferring the phone call. A customer talks to a real person directly, not with a machine. Stone wants to promote relationships, not just a normal Customer Service.

Law 3: Customers Expect You to Make Them Wildly Successful

Stone wants to change the market of payments. Just for existing, it pressured a market that was rigid to offer a better quality and attention to the entrepreneurs. The ones who benefit with this competition between companies are the Brazilian Entrepreneurs and that’s the way it should be.

Stone listens to the entrepreneurs who complained about the lack of transparency, bad customer support and abusive prices and build solutions for their problems.

Law 4: Relentlessly Monitor and Manage Customer Health

There’s always an awesome team of salesmen specialized to solve problems on the street with metrics to visit clients weekly. Stone measures product usage, NPS, calls to support and number of complaints. But most important, they build strong relationship with clients.

Law 5: You Can No Longer Build Loyalty through Personal Relationships

Stone is known as a company that cares about the entrepreneur, they’re great in building relationships, but they’re also great in technology. Its product is the fastest in the market with features to help the entrepreneur to check his transactions easily.

I think Stone has a lot to improve, his growth is highly dependable on relationships yet. Their focus is to educate clients on this new model.

Law 6: Product Is Your Only Scalable Differentiator

Stone is new in this market and it’s competing against strong competitors and a way to differentiate from them is to invest heavily on technology. Stone has the fastest machine of transactions in the market and a portal with total transparency with customers.

Law 7: Obsessively Improve Time-to-Value

At Stone, activation takes one day, there’s no need to sign a contract. No charges to opt-in and if a customer is unhappy, he can leave at anytime with no cost. They’re fast to active customers because they understand that the faster they have the solution ready, the faster everybody wins.

Law 8: Deeply Understand Your Customer Metrics

Stone understands what goals matter for them, they talk and listen to their customers. Stone’s purpose is to potencialize the Brazilian Entrepreneurs and they’re only beginning through payments solutions. I think there’s more to come.

Law 9: Drive Customer Success through Hard Metrics

Stone’s mission isn’t easy. It’s to help the Brazilian Entrepreneur to be successful. Brazil is full of bureaucracy, taxes and full of obstacles to have a business. Stone wants to help them to overcome those obstacles.

Many owners of stores or restaurants don’t have any kind of planning, management, nor anything alike, they’re just doing as it goes. Stone’s consultants help these owners step by step to run their business, starting with the basics, like checking their cash flow, logistic and basic management.

Law 10: It’s a Top-Down, Company-Wide Commitment

Stone is growing fast, hiring more than 250 people per month and they’re spreading through Brazil. To maintain a sustainable growth, Stone invests in their culture of meritocracy and client-focused. To be promoted, you must deliver results and be a multiplier of the culture. The leaders are the example.

Stone is a great example of a company that’s rocking on Customer Success in Brazil. They’re basically a huge startup that’s growing fast focusing on making customers successful.

A post shared by AIESECPeru (@aiesecenperu) on May 15, 2017 at 9:21am PDT

I taught English for more than 250 children from 6 to 12 years old in Ica.

I learned from this experience that we, as individuals, have the power to change people’s lives directly and indirectly and it doesn’t require much. You can teach English to a child in your neighborhood or fix the computer of your aunt and these actions will be valuable for them.

AIESEC provided me a new home in Peru with an amazing family who gave me unconditional love.

If you want to see more pictures with these lovable children, you can check it out here.

In my last year as a Junior Entrepreneur, I wanted to return the value that I received from the Junior Enterprise Movement. So I presented some lectures and workshops about ‘PM CANVAS’, ‘Leadership’, ‘Personal Organization’. And I mentored 4 members at Biotec Júnior.

2015 – Vice President at Biotec Júnior

My big family Biotec Júnior.

As a VP, I worked with the President to create a culture of results. Biotec Júnior had a growth of 365% in a year with the highest number of projects done since the foundation of the Junior Enterprise.

In the journey to make more projects, we had the highest number of members going to events of the Junior Enterprise Movement, we established an annual internal event named ‘Immersion’, in which we join everybody in a country house for a weekend to get us closer and to discuss our Strategic Planning. We became a big family.

2014 – Project Manager at Biotec Júnior

We spent hours working on our projects, the laboratory was our second home.

In my second year at Biotec Júnior, I managed our first consulting project with a team of more than 10 members.

Close to the deadline, we weren’t sure if we could deliver what we promised to our client. I couldn’t delegate well and I wasn’t sure about anything. I wanted to give up.

But Biotec Júnior didn’t let me do it, I was helped by the whole Junior Enterprise, mainly by the President at the time, Nicola Carlucci, who taught me powerful lessons of leadership and recommended me the book The Servant by James C. Hunter, which was essential to make who I am today.

Becoming a better leader was the main reason we delivered the project successfully, the people were there to make things happen, all they need was someone to give the right directions.

Looking backwards, I can say that overcoming this challenge was the turning point of my career in the Junior Enterprise Movement. I became hungry for more.

Books I’ve read (Updated 08/07/2017)

Outliers: The Story of Success by Malcolm Gladwell

The Servant: A Simple Story About the True Essence of Leadership by James C. Hunter